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Monday, June 6, 2011
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A Muffled Megaphone for Radio Industry


This is not news, but a warning of what may become news.

There's trouble ahead if the radio industry continues to rely on itself to drive audience to its online resources. This statement has its origin in a couple of facts: 1) Radio stations do not fare well in ranking high on search engines; 2) U.S. radio stations, in particular, don't bother with trying to get a listing at radio portals, even though "portals" are the second most used means for people to find radio online behind search engines.



The first statement can be verified by a visit to just a few of the dozens of articles that have appeared here:
Radio and Search Engines
Shelf Space in the World's Radio Market
How to Find Radio Station Web Sites

As for the claim that U.S. radio stations don't try to get listings at radio portals, that's an observation I can make from personal experience.

Each week AG's RadioRow adds six stations to its lineup. It receives about 10-15 suggestions for stations each day.

"...the opening, where no company seems to be focusing on, is in helping local merchants reach a national, or international, consumer." Though I could take the time to give precise figures, let's simply go with an estimate of 75% as to how many of the "suggested" stations are internet only. With the remaining 25% being broadcast-based, I'll give another estimate that only 3-5% of these come from U.S. radio industry stations. The rest come from other countries. Why do you think that is?

I only have a guess to offer here, and it's that most radio execs in the U.S. feel that their stations have enough power to attract an audience simply by saying "go to our web site" over the air. This isn't a bad thought if (due to high royalty rates) all you want is to attract locals to your radio station's stream.

However, if your goal is to compete in the online ad marketplace, you'll need far more than just an on-air call to visit. I believe the rationale for reaching a national/global audience online is that part of future revenues for radio will rest on helping local advertisers sell their products to a national/global online consumer.
Just pulling in a local audience won't do a radio station much good. Using Arbitron's
market ranker, let's pick Hartford CT as the example (Market #42 - 1,054,800 Metro
12+ population).
If you are going after strictly the local draw for a rock station, in general terms,
here's what you're likely to find: 843,840 of its population is online.
From AreaConnect.com, we see that 47% of its population consists of people
between the ages of 15-44 (extrapolated to Arbitron's market ranker that's 396,604).
To show how muffled the radio industry megaphone has become relative to rock radio,
we could leave things here; rock radio reaches only 37.6% of Hartford's population
(serving 149,123 "connected" people) with only 47.8% of them males (or, 71,280).
Now add a 0.4% standard response rate for a call to action, as determined by years
of my analytic work in tracking campaigns, and we have 285 respondents.
If Hartford's four rock stations share audience equally, 71 people will respond to each.
Here's the caveat, this is if all 71,280 males are listening at the same time!

Even if we are generous in giving a 4% rate to those persons who actually take action and arrive at the web site, that's still just 2,851 people.

The bottom line in this discussion is that the radio industry needs to develop a larger geographic base for its online listeners than just a station's local population. The second (and perhaps more important) point is that radio needs to start acting as its clients' on-ramp to online.

There is no reason why any market's radio group cannot help a local merchant sell products through the internet. To leave this action up to local web design firms, search engine optimizers, or keyword ad buyers will be like walking away from billions of dollars in future revenue.

Yes, we see major internet players going after local advertisers. Radio will not be able to compete in this area because people tend to research purchases, and advertisers are seeing value in being on search engines and social networks. Another drawback is that the radio industry hasn't grasped the "how" behind geo-targeting on a local level, nor does it appear to be seeking answers to how this is done.

My most compelling argument is that the opening, where no company seems to be focusing on, is in helping local merchants reach a national, or international, consumer. Radio, with its close ties to local advertisers, needs to show it will help them expand their sales reach beyond the local scene.

That on-air megaphone won't be nearly as important as the attention you can draw to a local merchant's products in helping them deliver their message to the entire United States. So put down the local megaphone, and pick up on expanding your online audience outside of your market.

Eventually the grass is going to be far greener on that side of the fence.















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